Luxury homes have caught the market’s fancy with nearly $2 billion (over . 10,000 crore) worth of such houses launched across the country last year, this at a time when there’s a general slowdown in the housing segment.

According to estimates, close to 5,000 homes priced above . 3 crore (above . 5 crore in Mumbai) were launched across major metros during the year as absorption beat supply in many of these markets.

“Luxury real estate usually does well during recession or sluggish environment as we are seeing even now. In a highly uncertain environment, the super-rich clientele prefers to put their money into these hard assets than any intangible service or instruments,” says Sanjay Dutt, executive MD — South Asia, Cushman & Wakefield.

Sales of luxury homes across big cities such as Mumbai, Bangalore, Gurgaon, Chennai and Pune have been moving up along with 6-23% year-on-year price rise in this segment, reaffirming the upward movement. Mumbai, for instance, sold 789 units against 652 new launches; Gurgaon sold 792 compared with new launches of 726 units, while Chennai saw sales overtaking new launches by 17%. Although cities like Bangalore and Pune have seen sales numbers lower than new launches, prices here too have risen by around 10% from a year ago.

“Real estate continues to be the most preferred asset class with rich Indians due to higher returns. However, clients are only investing with reputed builders, who can deliver on time,” says Rajesh Iyer, head — investments and family office, Kotak Wealth Management. This was the picture at a time when other real estate segments have remained sluggish for most part of the year forcing developers to offer discounts and other incentives to attract buyers.

“Luxury home is the reflection of social status and lifestyle for the rich, which they can flaunt to friends and family. While some park money in buying luxury homes for mere investment, others are upgrading to get like-minded neighbours,” says BM Poonacha, head — land and special projects at LJ Hooker Project Marketing India.

Mumbai, the country’s most expensive property market, registered sales numbers which were more than supply figures, thereby reducing the existing inventory in this segment. Although launches here in 2012 had almost halved over 2011 due to absence of civic approvals, sales numbers moving above supply along with 23% rise in prices, indicate the response. Omkar Realtors & Developers, that launched four projects, the most by any developer in this segment in the past year, is preparing to launch super-premium apartments at Worli in central Mumbai which will come with a price tag upwards of . 10 crore. “The market has been upbeat in this segment and allowed us to launch these projects. Fortunately, approvals for these projects were also received on time and we have received bookings worth . 1,400 crore through these launches so far,” says Gaurav Gupta, director of Omkar Realtors & Developers.

High-end apartments priced above . 3-30 crore coming up across Bangalore, Chennai and Gurgaon have become hot spots for investment for the Alist, who are opting for either bungalows or villas with an eye on higher returns.

“There’s no slowdown for luxury homes, as it is not a necessity but an alternative. Small luxury projects are doing very well. However, the time taken to close these transactions have gone up from three months to eight months as buyers look for safe havens to park their money,” says Prashanth Sambargi, partner at Mars Realty that recently closed two such transactions valued around 3-8 crore each.